Kodak Aiming For No. 1 Spot In U.S. Digital Camera Sales in 2004

Kodak is scrambling to make the transition from film to digital photography after getting blind-sided by the swift rise in popularity of digital cameras. It lost ground to Sony, Canon and Olympus and even gave up a chunk of market share to computer giant Hewlett-Packard.

The struggle seems all the more painful since Kodak invented the world's first digital camera prototype in 1976. But the picture appears to be changing.

Kodak jumped ahead of Sony, the No. 1 U.S. seller of digital cameras for the past five years, in both November and December, market researchers say. 'It is our goal to move into the No. 1 position in 2004,' said Nancy Carr, Kodak's director of worldwide consumer advertising.

Its latest EasyShare consumer cameras, priced between $129 and $499, were unveiled Thursday at the annual International Photo Marketing Association trade show in Las Vegas.

The aim-and-shoot digital line, launched in 2001, comes with a docking station that enables images to be transferred to a computer at the touch of a button. The cameras also can be hooked to printers that deliver 4-by-6-inch prints in 90 seconds.

Until a few years ago, 'the problem with digital photography was that it was very cumbersome and slow to get your prints,' said industry analyst Ulysses Yannas of Buckman, Buckman and Reid in New York.

'What Kodak did, and it helped them a lot to gain this No. 1 position, is make it very easy. You take your photograph, press a button and it downloads all the photographs in seconds.'

In all of 2003, when digital cameras outsold traditional film cameras for the first time in the United States, Sony ranked first in sales with a 22 percent market share, down from 24 percent in 2002, according to IDC, a market research firm in Framingham, Mass.

Kodak moved into second place with an 18 percent share, up from 13 percent in 2002, IDC said. Canon was third with 15 percent and Olympus kept ahead of Fuji with 12 percent. Hewlett-Packard was in sixth spot with 8 percent.

The Photo Marketing Association, based in Jackson, Mich., estimates that 15.7 million filmless digital cameras and 10.6 million film cameras will be sold this year.

Kodak grew into an icon on the strength of its chemical-based film, paper and photofinishing businesses. It is aiming to invest $3 billion in digital markets _ consumer photography, commercial printing and medical imaging _ over the next three years.

The digital businesses generated $4 billion, or about 30 percent, of its $13.3 billion in 2003 sales. Kodak said it expects digital imaging to account for half of its profit and 60 percent of sales by 2006.

In afternoon trading on the New York Stock Exchange, Kodak shares were down 37 cents, or 1.3 percent, at $29.

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